Andrew Southcott (Boothby, Liberal Party, Shadow Minister for Employment Participation, Training and Sport) Share this | Link to this | Hansard source

The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 enables the government’s new employment services, which will run from 1 July next year to 1 July 2012. Some of the changes in this bill are minor, but there are major changes to the compliance framework. The Job Network was introduced by the former coalition government in 1998. Since it was brought in to replace the ailing Commonwealth Employment Service, unemployment has dropped from 8.1 per cent in May 1998 to a 33-year low of 3.97 per cent in February this year. While sound economic management and an environment of economic growth certainly played a major role, ultimately the reduction in unemployment was facilitated by an employment services system that had a focus on employment and reiterated the mutual responsibility of the job seeker to actively engage with the system supporting them. By having a firm but fair compliance regime that commits job seekers to actively seeking employment and engaging in activities that can help improve employment prospects, the former government discouraged welfare dependency.

As I have said previously, the Liberal and National parties support some of the elements of the government’s proposed new system. For example, the blending of the employment programs is something that we would have done had we been re-elected; we think it is a good idea. We think that the concept of employment brokers and the $41 million innovation fund panel are both sensible reforms to the new employment services. In the minister’s foreword to the discussion paper entitled The future of employment services in Australia, the Minister for Employment Participation states:

The Job Network is no longer suited to a labour market characterised by lower unemployment, widespread skill shortages and a growing proportion of job seekers who are highly disadvantaged and long-term unemployed.

This has been the government’s rationale for some of their changes to employment services—that the Job Network ‘is no longer suited to a labour market characterised by lower unemployment’—and it is hard to think of a document which has become out of date more quickly than this one. The new universal employment services model was designed at a time when the labour market was still strong. The work on this was done in February 2008, when we had the lowest unemployment in a generation. But now, six months later, we have had speculation in the media at the weekend that an additional 200,000 Australians may lose their jobs within the next 12 months. It has taken Australia the last six years to reduce unemployment by 200,000, yet in the space of one single year that achievement is set to be undone.

The Liberal and National parties cannot support the new ‘no show, no pay’ system which has been proposed by the government. We believe it will undermine the successful inroads the previous government made into long-term unemployment and welfare dependency. We are also concerned about the discretion which will be given under this legislation to the departmental secretary to undermine these hard-won reforms to welfare. Since the unemployment benefit was first introduced in 1945, Australians have had an expectation that those receiving benefits would be required to look for and accept work. It was the Chifley government that first introduced laws which said that if a job seeker were not taking reasonable steps to obtain employment then they would lose their benefit for between two and 12 weeks. Since then, the notion of mutual obligation has had broad community support, and it is consistent with our own values. Unemployment benefits are designed as a temporary measure to help the unemployed when they require it, but with the right to receive this assistance comes a responsibility to do the right thing and look for work. Many groups were critical of the previous Howard government’s approach to welfare reform, but this approach was important in breaking the cycle of welfare dependency and reducing the numbers of long-term unemployed.

Under the latest round of Welfare to Work changes, according to the Department of Education, Employment and Workplace Relations’ Labour market and related payments: a monthly profile, the number of long-term unemployed fell from 205,212 people in June 2006 to 146,533 by August 2008. This represents a drop of almost 30 per cent in just over two years, which makes it more surprising that the Labor Party has decided to introduce a much softer set of sanctions for those who do not attend Work for the Dole training or even a job interview. In the future, for those on Newstart, parenting payment or youth allowance with activity requirements, Labor will introduce a ‘no show, no pay’ system which involves the loss of one day’s benefit for those who do not turn up.

To demonstrate how much of a departure this is for Labor, we should look at what they did when they were last in office. Under Paul Keating’s Working Nation, not attending a job interview would see a job seeker’s payment suspended for between two and six weeks. Under Labor’s proposed new change, a job seeker who does not attend a job interview will lose just one day’s payment—$42.98 for someone on the single rate of the Newstart allowance. It will be possible to not turn up to six job interviews in a six-month period before a Centrelink review is triggered. The Labor Party have defended the ‘no show, no pay’ concept by saying it is more work-like, but see what happens at your workplace if you start regularly not turning up to work without an excuse. It is unlikely you would simply be docked a day’s pay. The problem with weakening the compliance regime is that it will be much less effective in changing behaviour for the positive. It will become a toothless tiger. At present, the most common reasons for an eight-week suspension of benefits are failing to attend an interview with your employment services provider, failing to comply with an activity agreement or failing to attend Work for the Dole. These will all be treated much more leniently under Labor’s proposed new scheme.

Looking internationally, countries similar to ours have recognised the importance of a strong compliance regime. In their July 2008 green paper on welfare reform, the British Labour government emphasised the importance of a stronger sanctions regime and, in fact, proposed losing a week’s benefit for missing a job review or appointment and escalating the sanctions for failures after that. In the United States, it was Bill Clinton who declared ‘an end to welfare as we know it’ and supported welfare reform which has dramatically reduced the numbers on American social security rolls.

When the former Howard government introduced the Welfare to Work reforms in 2006, they were designed to reduce welfare dependency, establishing a patent link between receiving income support and actively seeking employment or, failing this, contributing back to the society that supports you. It was recognised at the time that there were still far too many long-term unemployed who appeared destined to remain on welfare indefinitely. Providing an opportunity for job seekers to gain skills and training through a mutual obligation activity helps with their employability and reintroduces them to a work-like environment. By tackling welfare dependency head on, we can break the cycle of welfare dependency by keeping job seekers on track and job ready.

Mutual obligation is crucial to help break this cycle of welfare dependency. Not only does this help reduce the cost of welfare on society as a whole but it also assists in reducing the significant human cost of welfare dependency and intergenerational unemployment. Mutual obligation activities, such as Work for the Dole, help to make job seekers job ready. These activities can provide training and skills for job seekers, boosting their confidence. However, these requirements to participate were never intended to punish job seekers who did the right thing. Job seekers were entitled to miss three appointments over a 12-month period without a valid excuse before they would incur a financial penalty. If a job seeker had a legitimate reason for missing an appointment, they would not have a participation failure recorded. They would then be referred to Centrelink, who would determine whether there were in fact any additional factors that may have prevented a job seeker from participating.

The Labour market and related payments report published monthly by the Department of Education, Employment and Workplace Relations shows a strong decrease in the overall numbers of long-term unemployed. In August 2008, there was a 14.4 per cent decrease in the number of long-term unemployed job seekers in receipt of either Newstart or youth allowance over the preceding 12 months. In human terms, that is 24,574 fewer long-term unemployed in the space of one year. That is an achievement the former coalition government is happy to take credit for. In meeting the objectives of reducing welfare dependency and reducing the numbers of long-term unemployed, the employment services system was working; it was effective. The compliance system was working; it was effective. Our Welfare to Work reforms helped to discourage the long-term unemployed from languishing on the dole queue and have provided the encouragement needed to improve their situation.

Labor’s new changes will herald the return of the dole bludger. In striking a balance between engagement and sanction, the government have got the balance wrong. As a result, the compliance regime will be much less effective. Going into the future, we will see, sadly, increased numbers of long-term unemployed if the Labor government have their system for employment services passed by this parliament intact. This new system is farcical, providing no incentive for people to do the right thing. It will undoubtedly result in an increase in noncompliance as some people decide that losing a day’s welfare—$42.98 for a single person on Newstart—is worth a day at the beach or that it is financially more beneficial doing three hours work in the cash economy at the local pub or babysitting.

These changes proposed by the government do not encourage people to do the right thing. People who are in receipt of welfare have an obligation to the wider community that supports them. They have a moral obligation to look for work and, if they are unable to find work, they should contribute to the society that supports them. The coalition will be opposing this bill and moving amendments during the consideration in detail stage. These amendments have been circulated in my name.

By weakening the compliance regime, we are likely to see an increase in intergenerational unemployment, where children follow their parents onto the dole queue. A strong compliance regime is about tough love but it helps people get out of the poverty trap. The Rudd government need to rethink their lenient approach, which will encourage high levels of welfare dependency and sadly see the numbers of long-term unemployed continue to rise again.

Mark Butler (Port Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to follow a fellow South Australian member of this House. It is well known that the member for Boothby is a clever and thoughtful member of the House of Representatives. I can only conclude that he had that particular speech and contribution forced upon him because it is well known that he is capable of something much better and much more thoughtful than that backward-looking, fairly base contribution to this very complex area of public policy. It was replete with dog-whistle politic terms such as ‘dole bludger’ and ‘tough love’. As a fellow South Australian I certainly expected something more thoughtful and clever than that.

The Social Security Legislation Amendment (Employment Services Reform) Bill 2008 is yet another example of our fundamentally different approach to the opposition’s approach to the world of work and to creating a meaningful productivity and participation agenda for the future of Australia. You see that different approach reflected in a range of policy areas that interlink. Firstly, it is reflected in the education revolution. We want to make sure that our kids grow up as well-rounded citizens and are equipped with the range of skills they are going to need for jobs in the future—maths and science skills and basic numeracy and literacy skills.

You see it also in this government’s realisation that it has a role in lifting labour participation. The need for that role is nowhere more evident than in women’s labour participation, an area that stalled for years under the previous government. Under the previous government the percentage rate for participation got stuck in the high 50s. The rate was well below OECD averages, in spite of 17 years of significant economic and employment growth. The rate for women at child-bearing ages was especially low by OECD standards. It was 10 per cent below the labour participation rates for women in the UK and Canada and 15 per cent below the labour participation rates for women in Scandinavia, yet nothing was done by the previous government.

We know that, without family-friendly policies, the market does impose a glass ceiling on women’s participation. That is why this government—interlinking with all the other different elements of our productivity and participation agenda—has begun to look at paid maternity leave options, has increased benefits for families who require child care for their under-five-year-olds while attending work, has expanded the number of childcare places and has lifted the childcare tax rebate. This government is also looking seriously, for the first time in a dozen years in this country, at the work-life balance and what government measures are needed to improve the capacity of families to balance different aspects of their lives.

You see profound differences between the industrial relations policies of the government and those of the opposition. This government is committed to implementing its Forward with Fairness policy, a policy that was clearly articulated to the Australian people before the last election and that is in absolute contrast to the position that was adopted by the opposition before the 2004 election. This, of course, is a debate for another day—a debate that we on this side of the House very much look forward to engaging in.

You see it also in the area of vocational training. This is perhaps the greatest supply-side failure of the previous government in the labour market. It is not as if we did not see the skills shortage locomotive coming some years back. One estimate says that Australia in 2016 will be short some one-quarter of a million vocationally trained qualified workers. The previous government, instead of developing a meaningful and practical response to this challenge, engaged in petty ideological squabbles with state governments. It worried more about where young people were trained than how many were trained and with what skills.

Our approach is fundamentally different to that. The 2008 budget delivered on election promises from the Labor Party last year. It is delivering $1.9 billion over five years and 630,000 new VET places for Australian people. That already very significant number was increased in last week’s Economic Security Strategy to 700,000 places over five years, amounting to a commitment of over $2 billion over that time. Importantly, in that security strategy there was an injection of an extra $187 million in 2008-09, or 56,000 extra VET places, totalling 113,000 VET places funded by this year’s budget. That builds on the huge demand that has already been shown to be out there in the six months since the April 2008 announcement of our Productivity Places Program. Already 50,000 Australians are enrolled in that program. A very pleasing statistic is that some 1,000 participants referred by employment service providers have already obtained jobs after graduating from the Productivity Places Program.

For today’s purposes, you also see the fundamental difference in the important job of helping Australians get off welfare and get back to work. This is familiar territory for Labor—as the member for Boothby helpfully outlined—stretching back to the Chifley government. Mutual obligation in a meaningful sense was introduced by the Labor Party during the Hawke and Keating governments. It was the Labor Party that introduced an end to unconditional welfare entitlements. It was the Labor Party that introduced a meaningful requirement for recipients to actively seek work, enshrining it in the 1991 Social Security Act. And it was the Labor Party that developed a sophisticated mutual obligation concept that was enshrined in the 1994 Working Nation program, putting a stronger obligation on participants to accept a reasonable job offer and increasing penalties for failing to meet various obligations.

In stark contrast to the case management approach of Working Nation, particularly seen in the jobs compact for the long-term unemployed, the Howard government’s version of mutual obligation was harsh and ultimately counterproductive. The Howard government’s approach was punitive, even where circumstances might not necessarily warrant punishment. The Howard government’s approach showed a lack of balance between reward and punishment to promote participation. Ultimately, the Howard government’s approach led to a displacement of the problem to the welfare sector and the charitable sector. In particular, I draw the attention of the House to the impact of the eight-week suspension of payments after three strikes. Presumably, the introduction of that measure was intended to increase compliance. If that was the case, that aspect of the Howard government’s program was an abject failure. Penalties doubled from 2006-07 to 2007-08 across Australia. In my electorate of Port Adelaide, penalties more than tripled, the most obvious evidence of noncompliance with the system. Compliance plummeted after the introduction of a one-size-fits-all suspension system by the previous government. Suspension saw the recipient not only lose money but also disengage from the participation system. There was, bizarrely, no participation obligation during the period of suspension.

In the minister’s employment services review, the government received countless submissions detailing the arbitrary impact of the previous government system. The previous government’s focus on compliance without support ignored the characteristics of job seekers today, and this was a feature of many submissions to the employment services review, and I would like to draw the House’s attention to a couple of those. The Australian Council of Social Services drew the government’s attention to these facts:

• Although the skills required by employers have risen, most jobless people on working age income support payments have a Year 12 education or less.
• A growing proportion has not experienced stable employment for a year or more. For example, over 150,000 people have received Newstart Allowance for more than two years.

That is why our government matches a new compliance system with a meaningful approach to vocational training, particularly for the long-term unemployed. The Brotherhood of St Laurence said:

Demand for low-skilled labour has declined both in Australia and overseas. This is evident from the data that shows that nearly three-quarters of new jobs in the period 1990–2003 were taken up by university graduates. Only one in eight of the jobs went to job seekers without post-school qualifications …

Again this stresses the degree to which the characteristics or the demographics of employment services recipients have changed in recent years.

The impact on those who had payments suspended was also a feature of a number of submissions received by the government. The National Welfare Rights Network told us:

The relationship between this penalty—

the eight-week suspension—

and major dislocation, including homelessness, relationship breakdown, increased mental stress, illness, violence and crime is both categorical and direct.

Homelessness Australia reported on some research undertaken by the University of New South Wales which found:

… 30 per cent of people who underwent an 8 week “breach” lost their accommodation or were forced to move to less appropriate housing.

The legacy of the Howard government in getting people back to work is best reflected in the statistics for the long-term unemployed. As we know, there was over the last 10 or so years very significant employment growth in the Australian economy on the back of the resources boom. But, if we look at the figures for those who were unemployed for more than five years, we see that between 1999 and today—the peak period of the resources boom—those numbers have increased from 74,000 back in 1999 to over 110,000 today, or, more relevantly perhaps, from one in 10 persons unemployed for over five years in 1999 to almost one in four now.

It is not as if the previous government was not warned about the consequences of the compliance system it introduced. The former shadow minister, Senator Wong, now responsible for other policy areas, made a number of speeches predicting that exactly what has come to pass would come to pass. I have read those speeches, and I pay tribute to her for keeping these issues in the public domain and ensuring that, on coming to government, the Labor Party undertook the employment services review and is now seeking to introduce the reforms that it is.

Australia’s unemployed and the Australian economy more generally need a new approach, and that is what we are getting from Minister O’Connor: a new, $3.9 billion employment services program to start on 1 July next year—a system that will be responsive to today’s circumstances of lower unemployment, very deep skill shortages and a pool of unemployed characterised by disadvantage and high needs such as we have not seen many years.

After an intensive period of consultation with the community, the government is introducing a new compliance regime, a regime that is set out in this bill. The regime will apply to all job seekers with participation requirements in receipt of Newstart and youth allowance, parenting payment and special benefit including parents. The new compliance regime restores balance to the system. It remains based squarely on the philosophy of mutual obligation, a concept supported by the Labor Party for many years, but it is a system recognising two realities. Firstly, it recognises that individual circumstances in this area do vary; and, secondly, it keeps front of mind that the goal of the system is to increase participation, not punish for punishment’s sake.

In contrast to the previous government’s one-size-fits-all approach in this area this bill calibrates the system’s response to, firstly, the seriousness of the offence and, secondly, the willingness of the person to return to activity or participation immediately. This bill retains the eight-week suspension for refusing a suitable job offer or for a series of missed appointments or activities but it recognises a series of lesser offences not recognised in the previous regime with a much more immediate and much better calibrated response. The first one is the no-show no-pay failure, which treats the recipient effectively as if they were employed. If you miss a day’s activity, for example, Work for the Dole, then you lose a day’s pay. This is an immediate penalty in contrast to the delayed response in the old regime. Secondly, there is a similar system in missing appointments such as with employment service providers. For those whose payments are suspended for eight weeks due to a serious failure, incentives are built in to encourage redemption and improvement in their behaviour. To avoid the nation’s government continuing to simply shift cases of severe disadvantage to our already overstretched charity sector, more meaningful financial hardship provisions are built into this bill.

While retaining the concept of mutual obligation at the core of our social security system, this bill introduces a 21st-century compliance regime to complement the training and participation opportunities presented through the Productivity Places Program. The current compliance system introduced by the previous government is broken. The statistics bear that out. This bill presents the solution and I commend the bill to the House.

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

The member for Port Adelaide chose to commence his presentation to this parliament with some derogatory comments about the previous speaker. Might I say, from one who has been here a long time, when you learn to make a speech without reading every word of it you will have the opportunity to give advice to others. It seems to be now a pattern within this parliament that even every answer to a question is pre-scripted and some of the jokes that are included are as flat as the floor in this parliament. The reality is—

Laurie Ferguson (Reid, Australian Labor Party, Parliamentary Secretary for Multicultural Affairs and Settlement Services) Share this | Link to this | Hansard source

Mr Laurie Ferguson interjecting

Wilson Tuckey (O'Connor, Liberal Party) Share this | Link to this | Hansard source

The parliamentary secretary interjects that it is the status of the questions. I am a great watcher of questions and when I hear question after question after question asked for a simple response of factual matters which the minister concerned should know and understand as part of his job and there is total obfuscation one can only put one reason on that: either they are ashamed of the figures and the reaction thereto or in fact they do not know—they did not ask.

In fact, it is the case with this particular measure, the Social Security Legislation Amendment (Employment Services Reform) Bill 2008, that after months of doing nothing the Rudd government is starting to do a few things. I think Australia would be better off if it stopped doing anything, if it went back to doing nothing. The evidence is that its recent and dramatic responses, while seeming okay in principle, have holes all over them, which of course are being demonstrated by forensic questions from the opposition. Here again we have an initiative based primarily on fixing something that ain’t broke. The old system addressing unemployment, which was totally bureaucratic, was clearly not working and there were one million people out of work. The economic circumstances inherited by the Howard government were such that there was no work for them. When one sets out to address unemployment issues and the administration thereof, the first thing is to get your economy right so that people have a choice of jobs and no reason to be unemployed. It is a fact that at this time that circumstance still applies, certainly in my electorate.

While I understand the need for skilled operators in many areas, take the case of Cooperative Bulk Handling in my electorate, which regularly takes on seasonal workers for the receival of grain at their numerous loading points, the ‘bins’ as we know them. They take people who are not experienced in that work. The training is provided by the employer and probably takes a few hours—they learn to operate certain equipment and away they go. It used to be part-time work for university students, who do not seem to be available or interested these days. But as I found out in talking to the executive of Cooperative Bulk Handling the other day, they are still desperately looking for people who will turn up.

I had a similar call from a hotelier known to me. From my recollection he wanted people to turn up to service his bedrooms and to work behind the bar. I know that there is a bureaucracy now that demands the right to give all these people a certificate—to do what? Make a bed as they should be doing at home? Or, for instance, to work behind the bar? On my experience of 30 years the people attended and said, ‘I’ve never done this job before,’ and you would say, ‘Okay’—and this was the simple response under the award at that time—‘you have the opportunity to work for x weeks as green labour’, which paid a salary three-quarters, I think it was, of the full salary. Of course, let me remind the previous speaker—if he were around to listen—that when he talks about female participation, when I entered the hotel industry in 1956 in Western Australia women got paid the same wage as men. That was a unique circumstance at the time. We never, ever wanted to discriminate between one and the other because we made our judgements on their skills at doing the job.

They usually learnt their job in a week or so and as soon as they showed some competence they went up onto full pay or the otherwise prevailing limit—but anybody who took the limit was clearly unsuitable. There are now all these jobs that you have to get a certificate for when the training period can be a matter of hours. The ‘skills’ in those days required people to be capable of adding up because the cash registers that were available were the press-down type. Today, as anyone would experience going into a hotel and asking how much the round of drinks delivered cost, the bar operative has to go back and press the relevant buttons on the till to find out how much they are going to charge you. If you are drinking with a group and you spend a fair bit of time there, you walk out with a pocketful of small change because they cannot even work out how to handle that at the same time. That is when they have a certificate, so what is the good of that? What have we achieved with this argument of skills when skills are something that can be successfully achieved on the job? All of the people who worked for me behind the bar frequently had no secondary education to speak of at all—but they could add up. They did so in their head and were able to present a customer with a round of drinks of any variety and tell them how much on the spot. When they got back to the till, they knew how to handle that.

Here we are with all these job opportunities and we have the member for Port Adelaide telling us how sympathetic we have to be for people who presently have been unable to find the jobs that are offering. If this legislation passes, we are going to weaken the penalties that apply to people who do not try to get or do not want a job. Much employment is very simple and, while one can constantly talk up skills, one of the major demands I know of is for semiskilled people or people who are prepared to learn basic tasks associated with many opportunities in employment. These days even someone who would apply to one of my farmers wanting machinery operators—people to drive headers and that—can be trained very quickly because things are computerised.

The other day it was brought to my attention by an employer, who was desperate for staff and willing to train them on the job, that a person turned up and said to him—he repeated this story to me—‘I’m here because I have to be here. I do not want the job. The job will mean that, after tax and all the other things that other, committed people pay, I will be literally no better off financially than I am on unemployment benefits. You can employ me if you like but, let me tell you, you won’t like me when I get the job.’ He at least was honest; a lot of others turn up in that circumstance and the next day have a bad back. They manage to injure themselves in the first week and then become another burden on society because, of course, they will be supported by insurance policies paid for by the general public. But this fellow left. He went back to Centrelink and said, ‘I attended.’ I do not think this employer rang up and put him in. They are too frustrated and too busy because they have to interview someone else. That is an example that is ever recurring. Why should there be sensitivity to that individual? Why should the member for Port Adelaide say, ‘You can’t call them dole bludgers’? That is what this bloke was, and there is a legion of those left.

I think these matters need to be understood. When there were a million unemployed and people were desperately seeking work, there was a requirement for compassion. In the present work environment, anybody can get a job. What are we doing? We are talking about bringing South Sea Islanders in to pick fruit—I am not critical of this—yet we are talking about changing the regime of how unemployed people are dealt with if and when they refuse the job as a fruit picker. I wrote down that the member for Port Adelaide talked about calibrating the ‘system’s response’. If you are fit, able and within a reasonable distance of jobs, why do you need to be calibrated? What is the purpose of a Job Network operator calibrating someone who does not want to work? Why should Australian taxpayers and all those people who up until recently were referred to in this House as ‘mortgage stressed’ and ‘both having to be employed just to meet their commitments to a home mortgage’ pay tax to support a person who does not want to work?

There was the tragic case of a family with seven children who received over $700 a week in welfare benefits and their children were breaking into premises to get food. Why? When the authorities checked out that house they found there was not one scrap of food in it. What is the score? Why are we here wanting to fix something that ain’t broke and wanting somehow to prove that that is a positive response from a new government? All of the people I know desperately want workers. They do not mind what workers’ employment backgrounds are as long as they turn up. I have watched it. I have also watched our side of politics do what I think were very stupid things. I still have in my pocket a licence that allows me to drive a heavy truck. I used to have one that allowed me to drive a road train. I did that in the years before I got a letter in the mail to say I was no longer entitled to drive a road train—not because I had forgotten how to do it but because I was not doing it consistently. Next they will be writing to people with pushbikes saying, ‘You haven’t ridden a pushbike for a few years; you’d better go to be retrained before you get on one.’

And you wonder why there is a shortage of seasonal workers. One contacted me and said, ‘For three months every year I was employed driving a heavy truck.’ He was driving a heavy truck—a highly skilled operator who for other parts of the year, as is common in my electorate, took other seasonal work. He knew exactly what his job was with three different employers every year, and one of those jobs was to drive a truck, delivering grain to the silo or carting super back from the works. Now they have taken his licence off him—that was done when we were in office—because he only worked three months a year. It was going to cost him $2,000 to go back and be retrained. For what? When you talk about skills, I can take you out in the country and introduce you to people who are highly skilled—welders with all sorts of equipment they have picked up during their lives—and many of them are forbidden to go onto many workplaces today because they have not been trained.

Then, of course, we had the Deputy Prime Minister telling us about her great training achievements. The member for Port Adelaide told us there are 50,000 people enrolled in training places. He might have told us how many of them are in their fourth or fifth training place so that they can avoid going to work, because I know of people in that category.

There is a fundamental rule in all of this, and that is that this parliament has a responsibility to protect the people who go to work. As for dual households, I have heard all the arguments saying, ‘I’m a single parent and therefore I have special problems.’ My children both work and have exactly the same problems, because they are both at work during the day. They are taxed heavily and they get nothing by way of welfare. The reality is that those people have rights. The average Australian taxpayer has rights and this parliament has the responsibility to see that people for whom work is available and who are physically able are in work. If they are not physically able, they should be on a disability pension. They should not be on unemployment, necessarily.

Profitable businesses have closed in my electorate because they could not get anybody to work in them. That is the circumstance. Try and get an Australian to work in a meatworks these days. Under the silly rules we operate under—and we were no better—you have to bring in foreign workers on 457 visas and pay them more than the award that is applicable to the Australian workers. You can imagine how the Aussie workers feel about that! That is how silly these issues are when we come to employment. But, if there is unemployment, I can name two meatworks in my electorate that will put on another shift when those people turn up, and they will train them. When you see a meat chain in operation, the skills can be very, very basic. You stand in one place—it is not the happiest of work—and you are likely to put a single cut in an animal carcass as it passes by.

Why, then, do we have to get to a situation that makes it easier for people to avoid work? That is the proposal within this legislation. You have heard the previous speakers and you have heard the second reading speech. I am astounded, nevertheless, that they made something of the fact—and the member for Port Adelaide repeated it—that the proportion of people on unemployment benefits who have been unemployed for more than five years has increased. Of course it has. The unemployment numbers have dropped from seven, eight or nine per cent to four per cent, so of course that proportion will be greater. But I find the figures astounding because they are inconsistent with those provided to me that relate to the changes since the introduction of the measures that are now to be changed. In 2006 there were 105,000 long-term unemployed and by 2008 there were 146,000. If you want to start being selective about the number of people unemployed for more than five years, there is no reason in Australia today for a person to be unemployed. There is work available in different categories, but it will not necessarily be in whatever category they choose.

This place should not be changing this legislation. The other legislation is working. If you are going to do as I explained and walk into employment interviews and make sure you are not given the job, if you do not turn up or if you toss a coin and say, ‘It’s a beautiful day—I can go to the beach and it’ll cost me 42 bucks,’ that is a judgement issue. But when you know that you should be out there seeking work or you are going to lose eight weeks pay, that is a different judgement issue altogether—and that is what this legislation proposes. But again, if it ain’t broke, why fix it? If it is compassion for people who will not go out and look for a job when they are available on every street corner, why should we be changing the legislation?

If it is going to cost working Australians more tax—those working families whom we never hear about anymore—and it must cost them more with all this calibration, the additional interviews et cetera, or if it will deny them benefits because the surplus is all gone, then is that fair? Is it fair that we, the Parliament of Australia, support legislation because the government wants to be seen to be doing something where change is not necessary? These are the criticisms I have of this legislation. We do not need it. It weakens the discipline on people who wish to be supported by the taxpayer to go and find work. It is a tragedy, because the other solution is to dramatically lower the payments they get, which makes work more attractive. I do not agree with that. If a person is genuinely out of work, they should get fair compensation. (Time expired)

Chris Hayes (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

If we are serious about getting people into jobs, we should be seriously looking at the system that underpins Job Search, which, quite frankly, is the mechanism to assist people to help secure employment. It is obviously our aim and objective to help those who are disadvantaged by assisting them, where we can, into gainful, paid employment. If we are serious about getting people into work, we need to actually have an effective compliance regime in order to encourage people to look for work. Regrettably, sometimes people do need to be led. I do not think we need to make any apology for saying that there must be certain incentives to encourage people to undertake their part of the mutual obligation package, and that is taking all possible steps to seek gainful employment.

The reality is that the former government presided over what was a rather harsh and counterproductive compliance regime that certainly penalised harshly when people did not comply. As a matter of fact, if one failed to comply on a third occasion under their regime, this would eventuate in one not receiving welfare payments for eight weeks. Under the eight-week regime, when a non-compliance penalty was triggered, a job seeker was not required to have any further contact with the employment service provider or Centrelink for that whole period. So, if someone was going to be in breach, what occurred then was that they would think there was no point doing anything else and that they may as well just sit back and do nothing. That is precisely what the Social Security Legislation Amendment (Employment Services Reform) Bill 2008 is designed to address. It is that ‘do nothing’ approach that the minister has sought to change in a constructive way to get the focus back on what we should be doing for job seekers—and that is helping them into gainful employment.

Therefore, I say that the current system is inadequate as a deterrent. It is certainly in its early stages too harsh on noncompliance and the penalties are too late. Under the current arrangements, the job seeker, as I said, could miss a fortnight’s participation before any action was taken at all. If noncompliance is going to be addressed in any way, we simply cannot have a situation where up to a fortnight goes missing before action is taken.

What we are trying to do through this legislation is bring about some real, mutual accountability. We know what our accountability is from a government’s perspective, and that is to take all possible steps to assist people to find employment. But we are also trying to instil in the job seeker the obligation that they must take all reasonable steps to comply and, in so doing, to find a suitable job.

When you think about it, if a job seeker fails to turn up to a job interview or something else that has been mandated under the Job Network scheme, nothing happens. On the next occasion that that same person fails to turn up, nothing happens. That person could then be complying and doing everything else but, if something occurs within that period of 12 months and they then miss a third job interview, that job seeker then incurs the eight-week penalty. It certainly does not equate with the mutual obligation I was speaking about. It does not draw the job seeker’s attention on the first two occasions to the fact that not turning up is pretty serious. It does not do that. It simply waits for the final trigger to occur and then down comes the guillotine—‘You will now incur an eight-week penalty and you will go off welfare payments for that period.’

If you listened to what the former speaker had to say—and I did labour through that speech—you would have heard him say that he did not think we needed to change anything in the current system. He thought it was fair and that people should be punished if they do not turn up and that this is what drives people into employment. That sort of stuff fails to equate with the fact that in the last two years these penalties have been in operation, 2006-07 and 2007-08, there has been a doubling in the number of people who have received eight-week penalties. Sure, this legislation has really meted out the punishment and, sure, there has been a doubling in the number of people who have incurred such punishment under the legislation, but what is not clear is: has this actually contributed to putting people into employment?

The last speaker also indicated that there has been a significant reduction in unemployment over recent years, and that is quite true. It is pretty clear to me that what has led to that is a resources led economic recovery, particularly in some states, that has significantly increased employment opportunities. That is not necessarily right across the board, however. I can indicate to the House that in my own electorate of Werriwa at the moment the rate for youth unemployment still stands at 23 per cent.

There is a mining boom out there. There is a resource led recovery taking place in Western Australia and Queensland. But 23 per cent of the young people in my electorate have tried unsuccessfully to gain employment. That is the real figure. That is the real world. That is what we should be working on. We should be encouraging and assisting these people into proper employment. We should not do that to simply reduce the unemployment numbers but to give them what a job gives to people: a sense of self worth and a sense of genuine commitment. Hopefully, that in turn will lead to value adding for our community generally.

We know that the compliance system has done nothing to reduce unemployment. Despite the doubling of the numbers that has occurred in the last couple of years, there has been no improvement in the attendance at Job Network interviews, there has been no improvement in the attendance rate at customised assistance and we know that this eight-week penalty does not act as an incentive to get people into employment.

What we have been told, and this is from the Welfare Rights Network, is that the relationship between the eight-week non-payment penalty and major dislocation, including homelessness, relationship breakdown, increased mental stress, illness, violence and crime, is both categorical and direct. That is borne out when we consider the people who we are applying this mandatory provision to.

Research conducted by the University of New South Wales Social Policy Research Centre has found that up to 20 per cent of people who underwent an eight-week breach lost their accommodation or were forced to move to less appropriate housing. We are not talking about people of means—people who are in the circumstances so that they can move or simply weather an eight-week break. Let us get this straight for this House: we are talking about the people who are least able to move and least able to find employment at the moment—hence they are on the programs that they are. We must appreciate the reality of that.

In terms of my own locality, Werriwa, not all that long ago I held a homeless seminar. What I sought to do was to bring together the homeless service providers, a number of charities, some churches and the New South Wales Police. I also brought along a number of kids that I have met from time to time who live on the streets in Campbelltown, Liverpool et cetera. It was a significant exercise to bring those people together. While we have this mining boom and while we have a significant number of jobs being generated in the resource based industries, there is a level of disadvantage that operates in our communities. I know it for a fact. In addition to the people I mentioned, I also invited on that occasion the local media. They were not there to simply take pictures of an event. Rather, they too have a responsibility, in my opinion, to not only carry a story but be part of the solutions, not covering things up. As a consequence, they have stayed consistently on this campaign to address the levels of disadvantage throughout the Campbelltown, Camden and Liverpool areas.

While going through that exercise, I learnt a number of things. Firstly, of those people who persistently struggle to find employment, the figures show that 15 per cent of jobseekers who get that eight-week penalty have a mental illness, while five per cent have an unstable housing situation. What we are doing is adding to their problems. The three strikes and you are out policy for welfare dependency is quite frankly penalising the most vulnerable in our society. There cannot be a punishment just for punishment’s sake. There has to be something that is an incentive. That is what this legislation is about: providing a positive incentive.

If you fail to turn up and fulfil your obligations, as opposed to waiving the first occasion or the second occasion and bringing the axe down on the third occasion, your payments are held back until you re-enter the system. People understand that. It is like ‘no work, no pay’; it is ‘no show, no payment’. If someone is on the network and has given undertakings, including attending various job interviews, and they fail to turn up and do not have a reason, those people’s payments will be suspended until they live up to their obligations. That is a fair system. People out there understand that. They do not understand a system that says ‘three strikes and you’re out’ regardless of when and where those strikes occur over any 12 month period; a system that penalises people eight weeks of their payment. The financial impact of all this is great.

Two weeks ago, I spent a morning in a soup kitchen that operates in Liverpool. I know that we do not talk about soup kitchens today, but let me tell you: they are real. I spent a number of hours out there with Pastor Gino Zucchi. He runs the Church of the Crossroads—called that, of course, because it is located at a crossroads. For a lot of people, this is their only real meal a day. I spoke with a lot of people who road pushbikes to get there. I spoke to people who had travelled from as far away as Fairfield to get there. This is a community thing.

These people are not going for the free meal. They are going there for other reasons, such the social interaction. Pastor Gino Zucchi’s program has people who can actually help people find jobs, work through the system, make contacts and write letters for employment. It is certainly more than just a soup kitchen. Just before I came down here—I should have prepared a bit earlier, I think—I asked Pastor Zucchi what he thought about the passage of this particular legislation. He said: ‘It would be ideal to have clients still participating in programs that enable them to find the appropriate employment because that is the real aim: to get people in employment—not a punishment regime. The reality is that it is often dependants and housing arrangements that suffer.’

What Pastor Zucchi said is precisely what the University of New South Wales and the research I quoted earlier said. People who are at the sharp end and who are out there working with disadvantaged people—trying to get them into employment and to give them a life and a future not only for them but for their families—know what the reality of this is. We are trying to have people comply. We are absolutely single-minded in that the compliance regime must be fair, decent and reasonable. I would invite members here to apply this sort of standard when considering this legislation as if it were applying to our own kids out there. Those 23 per cent of people all have parents, and hopefully their parents care for them. We are genuinely trying to give those people a future. To have a regime that is simply penalty based for the sake of being penalty based does not put people into employment.

A mining boom and all those things will take care of one area of our workforce and we certainly like to see all efforts going to increasing employment opportunities. But under this particular piece of legislation we are targeting those levels of disadvantage in our community and those people who are struggling. We do need to take the view of caring as if the people we are talking about were our own kids. We would want our own kids to be treated with fairness and decency and not to be subjected to something that is so punishment based that it becomes incomprehensible.

I also took the opportunity to have a talk to the Executive Officer of Macarthur Diversity Services, Karin Vasquez, who informed me they are very concerned that their organisation has many clients who have been repeatedly non-compliant. They see those people within their organisation as having severe barriers to work. She said: ‘Centrelink asking people why they are not complying is an important and necessary policy shift. For example, one of our clients is able to work in many respects, however an intellectual developmental delay affects his ability to comply.’ This is something I really was not aware of. Until today I was not aware that Centrelink does not go out and ask people why they have not complied, because, under this act, Centrelink is not required to. Unfortunately the three triggers are the magical things that trigger non-compliance and penalty. This one-size-fits-all approach is hardly a pathway to employment. It is penalty first, and opportunity is hopefully somewhere down the track. The idea of Centrelink having discretion to sit down and go through these compliance regimes is an added bonus. That was certainly in the mind of the Executive Officer of Macarthur Diversity Services. This is a significant piece of legislation and I commend the bill to the House. (Time expired)

Debate (on motion by Mr Price) adjourned.